The crypto market is entering a new phase of uncertainty as Goldman Sachs reviews its monetary scenario. The US bank now expects the Fed to hike rates next week, after stronger-than-expected underlying inflation in August. This change comes as bitcoin moves below $80,000. Investors have adjusted their expectations, with the probability of an increase now approaching 90%. The September decision could weigh on market reactions.
In brief
- Goldman Sachs now forecasts a 25 basis point rate hike from the Fed in September.
- US core inflation reached 0.3% in August, compared to 0.2% expected.
- The probability of a rate hike now exceeds 86% according to CME’s FedWatch.
- Bitcoin remains below $80,000 despite a favorable technical signal on the daily chart.
- The bitcoin golden cross ultimately failed to hold until the close.
Goldman Sachs abandons its status quo scenario
On July 31, Goldman Sachs defended the hypothesis of a Fed without change until the end of 2026. The bank estimated while rates would remain stable, with underlying monthly inflation likely to slow. The new data, however, led its analysts to revise this forecast.
From now on, theteam led by David Mericle anticipates an increase of 25 basis points at the September 16 meeting. The FOMC could raise its federal funds target range from 3.50% to 3.75%. JPMorgan, Citigroup, Mitsubishi UFJ and TD Securities also share this outlook.
In this context, the price of bitcoin is moving below $80,000, while the markets are integrating a different monetary environment. The Wall Street Journal reports which investors almost consider an increase next week. Attention therefore shifts to the trajectory of rates after this possible decision.
August inflation changes expectations
The trigger comes from the underlying August Consumer Price Index (CPI). This indicator, which excludes food and energy, increased by 0.3% over one monthagainst 0.2% expected. This difference took on particular importance in expectations regarding September.
Before the publication, analysts associated 0.2% with holding rates. Conversely, a result of 0.3% should reinforce the hypothesis of an increase. The data therefore provided the expected signal to quickly modify positions. Bitcoin thus remains faced with higher rate expectations.
CME’s FedWatch tool evaluated first the probability of a 25 basis point increase to around 69%. After publication, this estimate climbed to 86.5% during the session. Since then, overall market expectations have been moving closer to 90%, showing the rapid effect of the inflation figure.
Several signals had prepared the ground
However, the September increase is not based solely on inflation. In August, Chase emphasized already that the slower normalization of supply chains around the Strait of Hormuz could facilitate intervention. The establishment also mentioned the markets’ doubts about the credibility of the Fed in its fight against inflation.
Goldman Sachs now joins several institutions considering a more restrictive decision. Bitcoin is no longer just wondering if the Fed can raise rates. It also seeks to determine what this decision will imply for the future of monetary policy.
For bitcoin, this transition occurs while the price remains below $80,000. The context does not provide a clear signal to anticipate a reaction. The next indications will mainly depend on the FOMC decision and the expectations built around rates.
Bitcoin chart sends unfinished signal
However, the market showed an interesting technical sign on the same day. On the daily chart, the 50-day EMA briefly crossed above the 200-day EMA. Traders call this crossing a “golden cross” and use it as a potential signal of a change in trend. However, the signal did not hold until the close.
On the four-hour chart, another “golden cross” has remained visible since the end of August. The trend also maintains significant strength on the daily unit, with ADX at 45. However, the expected technical confirmation did not come at the close. Bitcoin therefore remains to be monitored in the face of monetary expectations.
The next FOMC meeting will therefore constitute the major meeting for the markets. If the 25 basis point increase is confirmed, investors will follow the indications concerning the continuation of monetary policy. In the short term, bitcoin could continue to evolve in line with monetary expectations and technical signals. The sustainable crossing of $80,000 will then depend on how the market integrates this new scenario.
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